Exclusive: Iran uses China bank to transfer funds to Quds-linked companies – report

Tue Nov 18, 2014 11:24pm EST
 
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By Louis Charbonneau, Jonathan Saul and James Pomfret

NEW YORK/LONDON/SHENZHEN (Reuters) - There is no trace of Shenzhen Lanhao Days Electronic Technology Co Ltd at its listed address in the beige and pink-tiled "Fragrant Villa" apartment complex in this southern Chinese city. The building's managers say they’ve never heard of it.

    But a Western intelligence report reviewed by Reuters says Shenzhen Lanhao is one of several companies in China that receives money from Iran through a Chinese bank. Such transfers help to finance international operations of the Islamic Revolutionary Guards Corps' elite Quds Force, the report said. 

    The Quds provides arms, aid and training for pro-Iranian militant groups in the Middle East, such as Hezbollah, Hamas and Shi'ite Muslim militias in Iraq. They have also armed and trained government forces in Syria's civil war in violation of a U.N. arms embargo, U.S. and European officials say.

    Washington designated the Quds a supporter of terrorism in 2007. The European Union sanctioned them in 2011.

    The report said that the Central Bank of Iran (CBI) holds accounts with the Bank of Kunlun Co Ltd, a China National Petroleum Corp unit. Quds-controlled Iranian companies, including one called Bamdad Capital Development Co, initiate transfers from these accounts to either Chinese entities directly controlled by the Quds or to Chinese entities owed money by the Quds, such as Shenzhen Lanhao.

    "The money transfers from accounts held by the CBI with Bank Kunlun are initiated by the Quds Force and transferred to Chinese companies connected to the Quds Force in order to meet its financial needs," the seven-page report said. Reuters could not independently verify the claims in the report.

    The suspected movement of Iranian funds linked to the Quds Force through a Chinese bank and Chinese companies is a reminder of the difficulty of enforcing sanctions on Iran at a time when the United States and other world powers hope to clinch a nuclear deal with Tehran by Nov. 24.

    The U.S. Treasury sanctioned Kunlun in 2012 for conducting business with Iran and transferring money to an entity linked to Iran's Revolutionary Guards, but there was no mention then of any link to the Quds.   Continued...

 
A general view of the Central Bank of Iran building in Tehran January 23, 2006. REUTERS/Morteza Nikoubazl